Foreclosure activity overall was down in the first quarter of 2011 when compared to the previous quarter and activity from one year earlier, but March figures showed a month over month increase in the number of default notices and evictions.

Foreclosure notices were filed against 681,153 properties in the U.S. in the first quarter, a 15 percent decrease from the fourth quarter of 2010 and a 27 percent drop from filings in the first quarter of 2010. This represents a filing on one in every 191 U.S housing units.  March filings, while still dramatically lower - down 35 percent - than in the same period a year earlier,  were up seven percent from the February number.  It should be noted that in March 2010 there were 367,056 foreclosure notices filed, the highest monthly total in the six years RealtyTrac has been reporting this data.

This information comes from RealtyTrac's March U.S. Foreclosure Market Report , a monthly compilation of data from the Irvine California firm which tracks documents filed in all three stages of foreclosure:

1.  Notice of Default (NOD) and Lis Pendens (LIS). This is the first legal notification from a lender that the borrower on a mortgage loan has defaulted under the terms of their mortgage and the lender intends to foreclose unless the loan is brought current.

2.  Auction - Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS): if the borrower does not catch up on their payments the lender will file a notice of sale (the lender intends to sell the property). This notice is published in local paper and contains information pertaining to the date, time and subject property address.

3.  Real Estate Owned or REO properties : "REO" stands for "real estate owned" and typically refers to the inventory of real estate that banks and mortgage companies have foreclosed on and subsequently purchased through the foreclosure auction if there was no offer higher than the minimum bid.

Much of the increase in activity since February was in the earliest stage of foreclosure, the filing of default notices.  A total of 197,112 U.S. properties received default notices (NOD, LIS) for the first time in the first quarter, a 17 percent decrease from the previous quarter and a 35 percent decrease from the first quarter of 2010. A total of 73,393 properties received default notices in March, up 16 percent from February but still down 37 percent from March 2010.

Foreclosure auctions (NTS, NFS) were scheduled for the first time on a total of 268,995 U.S. properties in the first quarter, a 19 percent decrease from the previous quarter and a 27 percent decrease from the first quarter of 2010. Foreclosure auctions were scheduled on 93,228 U.S. properties in March, down 4 percent from February and down 41 percent from March 2010.

Lenders foreclosed on 215,046 U.S. properties in the first quarter, a 6 percent decrease from the previous quarter and a 17 percent decrease from the first quarter of 2010. In states where the non-judicial foreclosure process is primarily used, bank repossessions (REOs) increased 9 percent from the previous quarter, and March REOs increased on a monthly basis in both non-judicial and judicial foreclosure states.

It is not known how much of the current activity represents a real decrease in mortgage distress or if foreclosure activity continues to be hindered by turmoil surrounding reports of improprieties, inefficiencies, and inequalities in the loan servicing  system.  State and federal regulators have been investigating servicer activities. New rules for managing distressed loans are being discussed and in some cases actually put in place, and servicers have been retrenching both to improve their processes and to protect their reputations.  In some cases decreases may merely be delays and increases may be the result of earlier barriers to foreclosure or logjams in the system being removed. READ MORE

 "The nation's housing market continued to languish in the first quarter, even as foreclosure activity fell to a three-year low," said James J. Saccacio, chief executive officer of RealtyTrac. "Weak demand, declining home prices and the lack of credit availability are weighing heavily on the market, which is still facing the dual threat of a looming shadow inventory of distressed properties and the probability that foreclosure activity will begin to increase again as lenders and servicers gradually work their way through the backlog of thousands of foreclosures that have been delayed due to improperly processed paperwork."

Nevada and Arizona remained the most active states. One in every 35 housing units in Nevada received some type of filing during the quarter but this was down 10 percent from the same quarter a year earlier.  However, after two months of improvement, foreclosure activity shot up 35 percent in March.   In Arizona there was big surge in bank repossessions which jumped 26 percent in March.  First quarter activity was also up 15 percent from the fourth quarter although it improved 17 percent from a year earlier.   One in every 60 Arizona houses received some type of filing in the first quarter.

California recorded the third highest rate of foreclosure activity with one in every 80 housing units involved.  Repossessions increased 17 percent quarter-over-quarter and March default notices were up 28 percent from the month before.

Utah moved into fourth place with one in every 98 housing units getting a notice followed by Idaho with one in every 106 units affected.